Service tax evasion on deals of Rs 40 crore sale involving an industrial security service agency was detected during a raid by Suratservice tax officials on Monday.

According to officials, who refused to divulge the agency's name, the raids were conducted after reports of illegal transactions at the official premises of this agency came in. The firm provides security to state and Central government-owned units apart from private firms.

"The evasion was detected after verification of all transactions. It was found that offenders had not paid tax for the past four years," said an official. "For the Rs 40-crore transactions, for which tax was not paid, offenders have to pay taxes amounting to Rs 4 crore at the rate of 10% service tax," the official said.

Source said the agency concerned is engaged in providing security to industrial units in south Gujarat, Oil and Natural Gas Corporation (ONGC) pipeline, Gujarat Mineral Development Corporation (GMDC) project, and 38 units spread across Ankleshwer, Mehsana, Bhuj and Saurashtra.